This public document was promulgated at an annual cost of
$1,174.04, or $2.98 per copy to comply with Sections 18.05 and
18.09, Florida Statutes, requiring the Treasurer to make an annual
financial report to the Governor and Legislature.

STATE TREASURERS OF FLORIDA
From the Admission of the State into the Union

In accordance with Chapter 18.05, Florida Statutes, I am pleased to
submit to you the annual report of the Treasurer of Florida for the
fiscal year July 1, 1976, to June 30, 1977. Attached in addition is an
itemized statement of the receipts and payments relating to each of
the several funds in the care and custody of the State Treasurer.

Respectfully submitted,

Bill Gunter
Treasurer of Florida

DUTIES OF THE STATE TREASURER

The Florida Constitution establishes the Treasurer as one of the
six-member elected State Cabinet and stipulates that "The treasurer
shall keep all state funds and securities" and "shall disburse state
funds" (by Comptroller's warrant countersigned by the Governor).
In addition to these conventional Treasury functions, a further
responsibility has evolved in recent years-namely the maximization
of investment of the State's pool of operating funds. The 1971
Legislature formally endorsed this concept, enacting a statute which
makes it incumbent upon the Treasurer, "consistent with the cash
requirements of the state, to keep such money fully invested or
deposited in interest-bearing time deposits ... in order that the state
may realize maximum earnings and benefits to the economy."
In addition to his Treasury Duties, the State Treasurer is the
Insurance Commissioner of Florida, State Fire Marshal, administrator
of the State Employees Deferred Compensation Plan, and a member
of the following governmental bodies:

The Treasury's pool of operating funds shrank drastically for the
second consecutive year. Also a substantially lower level of interest
rates prevailed during most of the year as compared with the past
several years. The result was another decline in Treasury interest
earnings (which two years ago were the fifth largest source of income
to the General Revenue Fund). Expenditures have grown faster than
revenues and the State has continued to deplete the reserves
accumulated during the good years of the early Seventies. It would
seem that the Legislature should consider maintaining larger sur-
pluses in the Treasury-not merely to enhance interest earnings but
more importantly to minimize peaks and valleys in the State's
financial condition. Let me point out that the average daily total in
the Treasury (cash and investments) during Fiscal 1976-77 was $538
million. Meanwhile monthly disbursements varied from a high of
$771 million to a low of $538 million, averaging $656 million.
A factor often unnoticed is that when the pool of operating funds
is inadequate to cope with the wide fluctuations between receipts
and disbursements, investments must be directed into ultra-short
term, low-yield U.S. Treasury securities. A larger reserve would
facilitate investment in somewhat longer term, higher yielding
instruments, including time deposits in Florida banks, to mature on
dates funds are projected to be needed.
With the Treasurer's sponsorship, several important sections of the
statute (Chapter 18, F.S.) governing the agency's operations were
amended by the 1977 Legislature and signed into law by the
Governor, as follows:
1. Authority is now provided for the Treasurer's investments in
U.S. Treasury securities to be in "book-entry" form, meaning
that possession of engraved certificates is eliminated as a
possibly implied requirement of the statute and that each such
investment is instead recorded on the books of the Federal
Reserve System with a safekeeping receipt furnished to the
Treasurer. As a matter of fact, all U.S. Treasury securities are
in process of being converted to the book-entry system, so
that in the future no other option will exist.
2. The revised statute spells out the Treasurer's authority to enter
into "repurchase agreements" in connection with investments
in U.S. Treasury securities. This means that a purchase by the
State Treasurer may include an agreement whereby the seller
promises to repurchase the securities at an agreed price, date,
and rate of interest.
3. Sections of the statute listing the types of collateral that may
be pledged to the Treasurer as security for State bank deposits
are completely reorganized into a more logical and understand-
able format, with excess verbiage removed.

4. Farmers Home Administration Loans are added to the list of
acceptable collateral.
5. The statute allows the Treasurer to temporarily accept pledges
of collateral in the form of a telegram (or telex) from a
second-party bank which promises to hold the collateral in
behalf of the Treasurer. The former statute set a time limit of
4 days during which a telegram could be accepted in lieu of a
safekeeping receipt from the second-party bank. The time
limit established by the revised statute is 15 business days,
which is more realistic in view of today's mailing conditions
and the tremendous volume handled by the safekeeping banks.

ITEMS OF SPECIAL INTEREST

Fiscal Year
1975-76

Securities in custody at
end of year ........................ $3,278,413,102.17

Average rate of interest earned ............. 6.5% 5.1%
Number of Florida banks holding
Treasurer's time deposits at
end of fiscal year ...................... 592 567

FOOTNOTE:
The above Treasury balances do not include the following cash and investments held by the
Office of the State Board of Administration in behalf of various agency trust funds,
pursuant to Sec. 215.44, F.S.:

(The above does not include $8,639,348.87 held in special accounts known as "Clearing
Accounts" and "Revolving Funds" outside of the Treasury. This is not a total amount
since the Treasurer did not receive reports from all state agencies prior to June 30,
1976.)

1,855.18
346,675,000.00
32,000.00
$ 400,707,424.06
(The above does not include $13,198,259.65 held in special accounts
known as "Clearing Accounts and Revolving Funds outside the State
Treasury. This is not a total amount since the Treasurer did not
receive reports from all state agencies prior to June 30, 1977.)

NOTE: It can be seen that in six of the twelve months the Treasury's cash outflow
exceeded income. As usual the fall months were the most difficult in this respect.
Approximately one-fourth of the above receipts and disbursements resulted from
the State Board of Administration's sales and purchases of short-term investments
for the some 600 agency trust funds.

SECURITIES IN CUSTODY OF
THE STATE TREASURER AS OF JUNE 30, 1977

BANK COLLATERAL (Safekeeping Receipts)
Pledged for State Treasurer's
Time Deposits and Demand Accounts ......
Pledged for State Treasurer's Investments
in Short-Term U.S. Government Securities
Pledged Under Trust Act of 1911
for Banks Exercising Trust Powers ........
Pledged Under Obsolete Statute
for Banks Exercising Title Powers ........
Pledged for Special Demand Accounts of Various
State Agencies (Note: Balances in these
Accounts are not reported to the Treasury):
Board of Regents (Various Cities) .......... $ 35,175,000.00
Miscellaneous Accounts (Various Cities) ..... 10,705,000.00
STATE-OWNED SECURITIES (Investments of various State
agencies-securities and safekeeping receipts deposited
by Board of Administration. All except common stocks

RETAINAGE COLLATERAL (Securities
and Certificates of Deposit Pledged
by Contractors on State Projects)
Department of Transportation ............
Department of General Services ...........
Tampa-Hillsborough County
Expressway Authority ................